Indonesia: Exemption from Import Duty for Health Services Goods

2020-01-13T09:36:12+08:00 December 29th, 2019|Insight, News & Events|

The import of health goods will normally be subject to a fiscal levy through customs duties and taxes in the framework of import (PDRI). Certain health goods may be exempt of import duties and taxes via the import duty exemption scheme

Goods for health services can be sourced domestically or internationally. Importation of such items can be divided into two: goods obtained from the purchase, and grant goods. The import of health goods will normally be subject to fiscal levy through customs duties and taxes in the framework of import (PDRI). This is likely to increase the price of imported goods. For savings and efficiency, the import of health goods can be provided with fiscal facilities through the exemption of import duties and import taxes (PDRI).

The procedure for the exemption of import duties for medical goods can differ from one party to another. It is important to distinguish the difference in the subject (recipient of goods), object (type of goods) and the allocation of the intended goods.
In accordance to Article 25 and 26 of Law No. 17 of 2006 concerning The Amendment of Law No.10 of 1995 on customs, health goods can be granted a Customs Exemption Sign using the scheme below:
a. Goods for charity and social purposes;
b. Goods for the sake of natural disaster management.
c. Goods for research and development of Science;
d. Goods for the need of disability;
e. Goods for the Central Government or Local government for public interest.
f. Goods for the need of government projects financed by loans and/or grants from abroad

In the process of issuing goods from the port, it is possible that costs associated with warehouse rental, handling, etc. may arise. Although the recipient of the goods has obtained the exemption from import duty and PDRI, the exemption is not related to these costs incurred in the process of issuing the goods and cannot be waived . The recipient can anticipate this cost by confirming the carrier and the designated customs broker, PPJK.

After the goods are released from the port by obtaining import duty exemption and PDRI, the importer or the receiver still has an obligation to comply with the provisions set forth in the letter ‘Decision on import duty Exemption’. Conditions that the recipient must comply with:
a. The recipient must use the goods in accordance with the provisions specified in the exemption decree of import duty.
b. The goods are not transferable to another party, except with the permission of the Directorate General of Customs and Excise. This is mainly used for items that are not consumables. In the event that the goods are used or intended to be shared (consumed or worn) to the prescribed party, then the handover does not require permission from Directorate General of Customs and Excise (DGCE)
c. The DGCE will conduct monitoring and evaluation for those goods that receive exemption from import duty. In this monitoring and evaluation, the recipient of the goods must be able to show related documents and/or the existence of imported goods.
d. DGCE may also conduct customs audits of importation of goods that obtain Exemption of import duty.